Removing Barriers Blog

Credit Unions Beat Back Taxation Bill in Iowa
Posted May 07, 2018 by CUNA Advocacy

Credit unions in Iowa saw a major victory Saturday as the state’s legislative session wrapped up when a bill passed without a provision that would have taxed credit unions in the same manner as banks. The victory is the result of CUNA, CUNA Mutual Group and a host of partners from across the credit union system standing with the Iowa Credit Union League and Iowa credit union advocates in waging battle against the provision.

Saturday’s bill is a compromise between the Senate and House, who passed dueling tax bills earlier this session. The Senate bill would have subjected credit unions and banks to the same bank franchise tax, which is calculated as follows--net income from 0-$7.5 million is taxed at 2% and net income over $7.5 million is taxed at 4%. The Iowa Credit Union League calculated that this would result in a tax cut for banks (which currently pay a flat 5% franchise tax on net income) would cost the state approximately $29 million. The House version would not have subjected credit unions to the tax.

CUNA President/CEO Jim Nussle joined the Iowa Credit Union League and nearly 1,000 credit union leaders at the state capitol in March to rally against the legislation that would have increased taxes on the state’s credit unions, while lowering them for banks. 

We will remain vigilant against similar proposals in other states as bankers continue to push false narratives about not-for-profit, member-owned financial institutions.